In a welcome relief to farmers, the Bombay High Court has directed banks to disburse farm loans immediately under the state government’s loan waiver scheme, The Indian Express reported on Sunday. The court also asked banks to not insist on payment of interest accrued on previous loans, since October 1 last year, as it had been waived by the government.

The Aurangabad bench ordered that banks should reimburse the farmers if they have already recovered the interest amounts.

On October 9, a division bench of Justices SV Gangapurwala and Shrikant D Kulkarni passed the order on a public interest litigation filed by Right to Information activist and agriculturist Kishore Tangade. Advocate Satish Talekar, appearing for Tangade, submitted that banks had not released crop loans to nearly one lakh farmers and told them that new loans would be released only if they pay interests on previous ones. He cited the example of the Aurangabad District Central Cooperative Bank to make his case.

The banks did this despite the state government’s flagship scheme – Mahatma Jyotirao Phule Karjmukti Yojana – under which arrears of up to Rs 2 lakh were written off for loans availed between April 2015 and March 2019.

Talekar also said that with the Kharif season of crops underway, delaying tactics by banks would result in huge losses to the farmers who would not be able to take benefit of the season without funds.

The court, in its order, observed that 2020 has been a “tumultuous year” due to the coronavirus pandemic and that it is necessary that farmers receive financial assistance in order to take benefit of the timely rains in the sowing season. “We hope and trust that the banks would be alive to the problems of agriculturists...the beneficiaries cannot be deprived of the crop loan for the kharif season 2020 on technical ground,” the court said.